Health Care Employment

hio Health Care Employment Labor Market Trends and Challenge s Ohio Health Care Employment Labor Market Trends and Challenges 2008

Ohio Health Care Employment Labor Market Trends and Challenges Table of Contents Preface... 2 Executive Summary... 3 I. Health Care Trends... 4 II. Industrial Makeup & Projections... 6 III. Occupational Outlook... 12 IV. Education & Training Infrastructure...16 V. Regional Analysis... 19 VI. Conclusions... 22 Technical Notes... 23 References... 24 Appendix A: Map of Ohio s Economic Development Regions... 26 Appendix B: Health Care-Related Occupational Projections by Training Needs... 27 Appendix C: Training Programs for Crucial Health Care Occupations... 29 Appendix D: Employment Projections & Wages by Economic Development Region, Selected Occupations... 31 1

Preface The health care industry is remarkable in that it appears largely resilient to the economic cycles that affect the rest of Ohio and the United States. 1 The demand for health care is not tied to the general state of the economy, but rather to public health, age demographics, and government policy and expenditures. As Ohio s population grows older, largely through the aging of the baby boom age cohort and as new medical technologies emerge, demand for health care will continue to increase, continuing its role as a high-growth sector within the economy. Section I contains a brief review of employment growth in health care industries over the past 30 years. Section II takes a closer look at the industries that make up the health care sector, comparing establishment size and relative importance in the economy. Section III examines the occupations that feed into the health care industries and projections for employment through 2014. Section IV addresses the educational and training needs for key health care occupations and gauges our educational system s ability to meet demand for training program graduates. Section V compares the health care labor markets in each of the state s twelve Economic Development Regions (EDRs). Finally, section VI contains final analysis and conclusions about health care employment in Ohio and its role in the state economy. The technical notes and references sections at the end of this report provide important information about the sources of information used and their relative strengths and limitations. In Ohio and nationwide, health care will be a crucial employment sector in the years to come. Careful examination of these industries and the occupations that feed into them will allow the state to take full advantage of health care s economic buoyancy. Keith Ewald, Ph.D., Chief Bureau of Labor Market Information Office of Workforce Development Ohio Department of Job and Family Services 1 Goodman, 2006. 2

Executive Summary The health care industry appears largely resilient to economic cycles, and demand is tied mostly to public health, age demographics, and government policy and expenditures. Demand for health care services will continue to increase in the coming years, making it a crucial employment sector in Ohio. The phrase health care in workforce development may refer to either a set of industries or occupations. The health care industry generally refers to three sectors: ambulatory health care services (NAICS 621), hospitals (NAICS 622) and nursing and residential care facilities (NAICS 623). From 1976 to 2006, employment in health care industries in Ohio has risen from 277,500 (one employee per 39 residents) to 633,000 (one employee per 18 residents), with little reaction to recessions in 1981, 1991, and 2001. The hospital sector is organized around a relatively small number of large establishments with large workforces, while ambulatory health care services and nursing and residential care facilities show an opposite pattern of numerous, small establishments with small workforces. Health care industries tend to have a bimodal distribution of average wages, with lowskilled, low-paying occupations on the one hand and high-skilled, high-paying occupations on the other. Compared to 15 export subsectors in Ohio, hospitals and nursing and residential care facilities have shown impressive employment growth from 2000 to 2006. There are 77 different occupations that may be considered health care occupations. Employment in these occupations is projected to grow 19.5 percent from 2004 to 2014, compared with 7.3 percent across all occupations. Four health care occupations are projected to be among the fastest-growing of all occupations: home health aides (45.0%), physician assistants (43.0%), medical assistants (42.2%) and diagnostic medical sonographers (31.0%). Six health care occupations had high proportions of incumbents ages 45 to 55 in 2000: psychologists (42.8%); medical and health service managers (35.1%); counselors (33.7%); speech-language pathologists (33.7%); licensed practical and vocational nurses (30.9%); and registered nurses (29.8%). Of the total workforce, 22.7 percent are in the 45-to-55 age group. There will be 22,176 projected annual openings in health care occupations from 2004 to 2014, 48.1 percent of which will be for replacement needs. Over one-quarter of the projected openings in health care will require less than a year of training. Around 3,000 annual openings will require a master s degree or higher. Although there is high demand for most health care occupations, there is concern whether the current educational infrastructure is sufficient to meet market demand for medical and clinical laboratory technologists, registered nurses and dental assistants. 3

I. Health Care Trends When we speak of health care, we may refer to a set of either industries or occupations. For industries these include ambulatory health care facilities; hospitals, both public and private; and nursing and residential care facilities. Figure 1 below compares the growth in these sectors with the growth across all industries. Total and health care employment levels were indexed or set equal to 100 for 1976. In 1976, there were 277,500 people employed in health care industries in Ohio. By 2006, this number had grown at a relatively linear rate to 633,000 people. While the growth in health care industries has been linear, with little reaction to economic cycles, total employment trends reflect the recessions of 1981, 1991 and 2001, along with the growth of the 1990s. 250 Figure 1: Health Care and Total Employment Growth (Indexed to 100 in 1976) in Ohio Health Care Employment Total Employment 200 150 100 50 0 1976 1977 Source: QCEW. 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Another way to appreciate the growth in Ohio s health care industries is to compare them to the population. In 1976, Ohio had a population of 10,753,000 2 and health care industry employment of 277,500 one employee in health care industries for every 39 people. Ten years later there was one employee for 27 people. Ten years after that, in 1996, there was one for every 22 people. Most recently, in 2006, the population was 11,478,000 and the health care 2 U.S. Census Bureau, 2007. 4

industry s employment was 632,800, or one health care industry employee for every 18 people. In other words, health care industries have grown more than twice as fast as the population. There is every reason to expect this growth will continue. Advances in medical technology and the aging of the population, whose health care needs are greater than the general population, should generate continued expansion. Expectations of public policy expanding health care coverage would further increase expenditures and utilization. In addition, since most of the health care industry cannot be outsourced, the growth will have to remain local. 5

II. Industrial Makeup & Projections At both the national and state levels, health care industries are projected to create more new jobs than any other major industry group approximately three million new health care wage and salary jobs nationally between 2006 and 2016, and approximately 91,400 new jobs in the private health care system in Ohio from 2004-2014. 3 As mentioned earlier, health care is composed, in terms of employment, primarily of three sectors under the North American Industrial Classification System (NAICS): ambulatory health care services (NAICS 621), hospitals (NAICS 622), and nursing and residential care facilities (NAICS 623). These three sectors have important similarities and differences related to their employment patterns. First, all three of these health sectors in Ohio enjoyed continuous employment growth patterns from 2000 to 2006 (Figures 2 through 4). They were impervious to the 2001 recession. 4 The data shown in Figures 2 through 7 do not include state and local government-owned hospitals. Although public hospitals are a small share of the total sector, trend statistics are similar. In 2006, there were 54 state and local hospitals in Ohio with a combined 29,430 employees and $1.32 billion in total wages. From 2000 to 2006, employment rose 9.5 percent and average weekly wages rose 27.9 percent. Normally, industry employment counts in publicly owned establishments are treated separately from private establishments since they may not react similarly to economic cycles. However, statistics relating to occupational employment, staffing patterns and training requirements, as used later in this report, include data from all types of establishment ownership. Figure 2: Summary Profile of Ambulatory Health Care Services (NAICS 621) Year Number of Establishments Employees Total Wages (thousands) Average Annual Wage 2000 16,918 187,196 $7,580,449 $40,495 2001 17,058 190,572 $8,051,639 $42,250 2002 17,348 197,711 $8,495,049 $42,967 2003 17,628 203,774 $8,851,097 $43,436 2004 17,657 208,811 $9,388,042 $44,960 2005 17,836 216,033 $9,858,473 $45,634 2006 18,063 221,354 $10,304,252 $46,551 Absolute Change, 2000-06 Percent Change, 2000-06 Source: ODJFS, 2007a. 1,145 34,158 $2,723,803 $6,056 6.8% 18.2% 35.9% 15.0% 3 U.S. Bureau of Labor Statistics [BLS], 2007a; Ohio Department of Job and Family Services [ODJFS], 2006b. 4 According to the National Bureau of Economic Research (NBER, 2003), the last recession started in March 2001 and ended in November 2001, peak to trough. 6

Year Figure 3: Summary Profile of Hospitals (NAICS 622) Number of Establishments Employees Total Wages (thousands) Average Annual Wage 2000 220 196,706 $6,420,405 $32,640 2001 225 203,015 $6,856,892 $33,775 2002 230 208,172 $7,303,838 $35,086 2003 221 211,670 $7,775,848 $36,736 2004 233 214,926 $8,368,529 $38,937 2005 221 218,632 $8,788,419 $40,197 2006 213 221,472 $9,361,792 $42,271 Absolute Change, 2000-06 Percent Change, 2000-06 Source: ODJFS, 2007a. -7 24,766 $2,941,387 $9,631-3.2% 12.6% 45.8% 29.5% Figure 4: Summary Profile of Nursing and Residential Care Facilities (NAICS 623) Year Number of Establishments Employees Total Wages (thousands) Average Annual Wage 2000 2,654 144,246 $2,882,237 $19,981 2001 2,841 150,117 $3,116,604 $20,761 2002 2,862 153,531 $3,303,193 $21,515 2003 2,940 156,599 $3,464,872 $22,126 2004 2,992 158,538 $3,608,163 $22,759 2005 3,131 159,700 $3,658,056 $22,906 2006 3,225 160,476 $3,778,217 $23,544 Absolute Change, 2000-06 Percent Change, 2000-06 Source: ODJFS, 2007a. 571 16,230 $895,980 $3,563 21.5% 11.3% 31.1% 17.8% Among the health care sectors, the organization of employment and number of establishments is markedly different for hospitals (Figure 5), in contrast to ambulatory health care services and nursing and residential care facilities (Figure 6). The hospital sector is organized around a relatively small number of establishments with very large workforces; the remainder of the health care industries are arranged in an opposite organizational pattern of numerous establishments with small workforces. 5 These contrasting organizational patterns have an impact upon the total wage package of workers and their respective training and advancement opportunities. 5 BLS, 2007a. 7

Figure 5: Hospitals and Employment by Number of Workers 80% Establishments Employment 70% 71.1% 60% 50% 40% 40.8% 30% 27.3% 20% 21.1% 20.4% 17.8% 10% 1.5% 0.1% 0% 1 to 9 10 to 99 100 to 999 1,000 or more Number of Workers Employed by Establishment Source: BLS, 2007a. Figure 6: Non-Hospital Health Services Establishments and Employment by Number of Workers 60% Establishments Employment 50% 48.4% 40% 38.1% 38.9% 30% 31.0% 23.7% 20% 10% 6.4% 10.7% 2.8% 0% 1 to 4 5 to 19 20 to 99 100 or more Number of Workers Employed by Establishment Source: BLS, 2007a. 8

Similar to the distributions of establishment sizes within the health care industries, average annual wages also differ between the health care subsectors. Figure 7 below shows that, while ambulatory health care services and private hospitals both had average annual wages above the state average, nursing and residential care provided below-average annual wages. These annual averages, however, tend to obscure the bi-modal characteristics of wage distributions within health care industries. These subsectors include large numbers of both high-wage/highskill occupations and low-wage/unskilled jobs. Individual occupations in health care are covered in greater detail in section III. Figure 7: 2006 Ohio Average Annual Wages by Industry Segment Code Subsector/Segment Average Annual Empl. Wage 621 Ambulatory Health Care Services $46,551 221,354 6211 Offices of Physicians $70,109 80,719 6212 Offices of Dentists $41,052 30,232 6213 Offices of Other Health Practitioners $32,500 27,403 6214 Outpatient Care Centers $40,195 24,320 6215 Medical and Diagnostic Laboratories $41,620 7,150 6216 Home Health Care Services $22,549 40,484 6219 Other Ambulatory Health Care Services $29,464 11,046 622 Hospitals $42,271 221,472 6221 General Medical and Surgical Hospitals $42,374 217,634 6222 Psychiatric & Substance Abuse Hospitals $39,673 1,163 6223 Other Hospitals $34,973 2,676 623 Nursing and Residential Care Facilities $23,544 160,476 6231 Nursing Care Facilities $24,449 103,125 6232 Residential Mental Health Facilities $22,092 23,629 6233 Community Care Facility for the Elderly $21,337 28,887 6239 Other Residential Care Facilities $24,513 4,835 Shaded subsectors and segments have average wages above the state average $38,600. (Approx. $19.28 per hour.) Source: ODJFS, 2007a. Many approaches to economic and workforce development start by classifying industries or sectors as local or export, using location quotients (LQs). A location quotient compares the concentration of an industry in an area to the concentration in a larger area, often the United States as a whole. Industries or sectors with high LQs, generally 1.2 or higher, are highly concentrated in an area and may be expected to bring new capital into the community from outside the local area. 6 The LQ for the hospital sector is 1.2 and the LQ for the nursing and residential care facilities sector is 1.4, meaning the concentration of these sectors in Ohio is higher than average. Although most hospitals provide services only to their local areas, there are several reasons they can become export industries. Research and medical specialty facilities may attract both patients and financial support from outside of their local areas. Ohio is home to several health 6 ODJFS, 2004. 9

care research facilities and nationally recognized specialty hospitals. 7 It may be more effective to concentrate some aspects of health care centrally within a region rather than have assets spread across the region. Other factors, such as population demographics or government policies, may explain the concentration of nursing and residential care facilities. The percentage of Ohioans 65 and older is above the national average, suggesting a higher-than-average need for health care. Ohio s health care policies may be attractive to some health care providers. Ohio Medicaid payments per older enrollee are above the national average. 8 In Ohio, which has not yet recovered the overall employment lost in the 2001 economic recession, the positive employment growth of the hospitals and nursing and residential care facilities (NAICS sectors 622 and 623, respectively) is impressive relative to other Ohio industrial sectors. Figure 8 identifies 17 export sectors in Ohio, including hospitals and nursing and residential care facilities. Compared with many of Ohio s manufacturing industries, health care employment has fared very well between 2000 and 2006. Figure 8: Ohio Employment Change and Annual Wages for Export Sectors 100,000 Employment Change, 2000-06 Average Annual Wages, 2006 80,000 60,000 Employees/Dollars 40,000 20,000 0-20,000-40,000-60,000 Paper Manf. Printing & Rel. Chem. Manf. Plast. & Rubber Manf. Nonmetalic Mineral Manf. Primary Metal Manf. Fab. Metal Manf. Mach. Manf. Elect. Equip. Manf. Trans. Equip. Manf. Nonstore Retail Couriers & Msgrs. Internet Pub. Finance & Insurance Mgt. of Companies Hospitals Res. Care Facil. Includes 3-digit NAICS sectors with a location quotient greater than 1.2. Source: ODJFS, 2007a. 7 America s Best Hospitals, 2007. 8 Kaiser Family Foundation, 2008. 10

The critical occupation for hospitals is the registered nurse (RN). For residential care facilities, the critical occupation is the licensed practical nurse (LPN). 9 These two occupations rank first in employment for skilled occupations within their sectors. Whether a result of high services demands of an aging population and shorter service-intensive stays in the hospital or financial incentives and government policy, hospital staffing patterns have changed significantly. An aging population has increased demand for hospital services. The funding reimbursement mechanisms used by the federal government for Medicare and by managed care programs have created a financial incentive for hospitals to keep patient stays as short as possible. 10 The result is that hospital patients require more highly skilled nursing than in the past, leading to increased employment of RNs by hospitals and decreased employment of LPNs. In the Ohio hospital sector, employment of LPNs fell from 9.5 percent in 1980 to only 3.5 percent in 2004. 11 During the same period, employment of RNs grew from 21.2 percent of staff to 27.1. In addition, the concept of magnet hospitals, which create attractive and productive work environments for nurses, emphasizes a preference for Bachelor of Science in Nursing (BSN) registered nurses. 12 In the U.S. and Ohio, it is projected that RNs will represent about 30 percent of the hospital sector s employment and that LPNs will represent between 11 and 13 percent of the nursing care facilities sector s employment in 2014. 13 Although both occupations are critical for the delivery of health care, as will be discussed in the next section, the labor markets for RNs and LPNs in Ohio represent two extremes. 9 ODJFS, 2007b (pp. 8 & 12). 10 Goodman, 2006. 11 Kelley, Blaine, Sandver & Wilkens, 1980 (p. viii); ODJFS, 2007c. 12 American Nurses Credentialing Center, 2008. 13 BLS, 2006; ODJFS, 2006b. 11

III. Occupational Outlook Health care may refer to occupations as well as industries. In 2004, health care industries, including public hospitals, employed over 610,000 people. Health care occupations, on the other hand, account for over 590,000 people. The difference in numbers can be explained by the fact that not all workers in health care occupations work in health care industries, while health care industries do not exclusively employ health care occupations. There is a large amount of overlap, but there are discrepancies. Registered nurses, for example, might work in a hospital or an elementary school. Conversely, a nursing care facility might employ both physical therapists and cafeteria cooks. Any examination of training needs will require a look at health care occupations. Although advancements in technology have brought new and improved medical services to patients, most analysts of health care expect new technologies to have little impact upon overall employment levels. The Bureau of Labor Statistics notes the lack of significant technological effects upon health sector employment, particularly for home health care services; outpatient, laboratory, and other ambulatory care services; private hospitals; and residential care facilities. 14 Recent technologies such as computer-assisted diagnoses, dispensing of medications, and record keeping and sharing may improve services, but not necessarily efficiency, unless they are also accompanied by organizational and managerial changes. There are 77 occupations that can be considered health care, as shown in appendix B. These health care occupations combined are projected to grow by 19.5 percent over the 2004 to 2014 time period, compared to 5.9 percent for non-health care occupations (7.3% for all occupations combined). Four health care occupations are among the fastest growing of all occupations: home health aides (45.0%), physician assistants (43.0%), medical assistants (42.2%) and diagnostic medical sonographers (31.0%). 15 New job growth is one component of occupational demand, but another source of job openings is net replacement needs. On average there will be 22,176 annual openings for health care occupations in Ohio through 2014. 16 Of these, 11,505 openings will be from growth and 10,671 will be from the need to replace people currently in these occupations. Even in many of lowgrowth health care occupations there will be a need to replace people. For example, for dispensing opticians in Ohio there will be 15 annual openings due to growth through 2014, but 68 annual openings due to replace needs. Both growth and replacement come into play when discussing the aging of the Ohio labor force. There is a need for more people, both skilled and unskilled, to take care of an aging population and a need to replace health care workers when they retire. The 2000 census was studied from the perspective of which occupations have a high proportion of individuals in the 44-to-55 age group. There are five health care occupations where more than 25 percent of the occupation was in this age group in 2000. These occupations are shown in Figure 9. 14 BLS, 2006 (pp. 119-120). 15 ODJFS, 2006b. 16 Ibid. 12

Figure 9: Selected Occupations and Proportions 45 to 55, 2000 Occupation Percent 45 to 55 Total, All Occupations, All Industries 22.7% Psychologists 42.8% Medical & Health Service Managers 35.1% Counselors 33.7% Speech-Language Pathologists 33.7% Licensed Practical & Licensed Vocational Nurses 30.9% Registered Nurses 29.8% Source: Goldstein, 2004. See technical notes for important details. There are health care occupations and openings at every level of education or training. For example, home health aides and personal and home care aides require less than one month of training, dental hygienists and radiologic technicians require associate degrees, and physicians and surgeons need professional degrees. Figure 10 shows what the education and training needs are of all occupations. From this table, it can be seen that each year over one-quarter of the over 22,100 annual openings in health care occupations require less than a year of training. At the other end of the spectrum, there are 3,000 annual openings for health care jobs that require a master s degree or higher. Figure 10: Education and Training Need Summary Employment 2004-14 Change Total Training/Education Level 2014 Annual 2004 Projected Net Percent Openings All Healthcare Occupations 591,340 706,390 115,050 19.5% 22,176 Short-Term On-the-Job Training 81,540 105,780 24,240 29.7% 3,758 Moderate-Term On-the-Job Training 41,780 54,280 12,500 29.9% 2,048 Long-Term On-the-Job Training 5,960 6,290 330 5.5% 147 Postsecondary Vocational Award 167,530 188,280 20,750 12.4% 4,821 Associate Degree* 154,460 189,270 34,810 22.5% 6,616 Bachelor's Degree 39,050 44,910 5,860 15.0% 1,372 Work Experience plus a Bachelor's or Higher Degree 10,620 12,260 1,640 15.4% 371 Master's Degree 31,800 37,480 5,680 17.9% 1,150 Doctoral Degree 5,460 6,200 740 13.6% 193 First Professional Degree 52,370 60,860 8,490 16.2% 1,687 *Registered Nurses are included in this category. Training requirements may be met through a two-year associate's degree, a three-year diploma, or a four-year bachelor's degree. Source: ODJFS, 2006b. This analysis focuses on occupations that had a 2004 employment of at least 5,000 and education and training requirements of not more than a bachelor s degree. Occupations that require only short-term on-the-job training and are easier to replace, such as home health aides, were also eliminated. The list of occupations was further narrowed by looking at the health care industries staffing patterns (occupational employment distributions for an industry) and choosing only occupations that were in the top 10. For this report, only occupations that had the largest numbers of employees in ambulatory health care facilities, nursing and residential care facilities, and hospitals were included. By looking at employment size, education and training requirements, and staffing pattern data, the list was reduced to 12 occupations. These occupations are shown in Figure 11. This table also provides data on the number of total annual 13

openings for each of these occupations, as well as the number of apprenticeship programs currently in operation in Ohio. Figure 11: Selected High-Employment Health Care Occupations Title 2004 Empl. Staffing Pattern Rank Total Ann. Apprent. Ambl. Nursing Openings Hospitals Progs. Healthcare Care Registered Nurses 107,010 4,630 2 1 4 ** Nursing Aides, Orderlies, and Attendants 76,600 1,994 21 2 1 11 Licensed Practical & Licensed Vocat. Nurses 37,690 1,204 8 3 2 ** Medical Secretaries 26,850 752 1 4 52 6 Medical Assistants 17,210 1,044 4 24 * 2 Dental Assistants 10,250 582 5 161 * 11 Emergency Medical Technicians & Paramedics 10,200 301 10 37 * 1 Radiologic Technologists and Technicians 9,620 394 24 6 * 0 Medical Records & Health Info. Technicians 6,530 227 29 16 26 0 Medical and Clinical Laboratory Technologists 6,200 275 41 8 * ** Dental Hygienists 6,070 226 9 202 * ** Respiratory Therapists 5,320 278 67 9 67 ** *Not included in the staffing pattern **Not an apprenticeable occupation Source: ODJFS, 2006b; 2007c. When discussing the education and training requirements of health care occupations, registered nurses are difficult to analyze because their training can be met through a two-year associate s degree, a three-year diploma, or a bachelor s degree. According to the 2004 National Sample Survey of Registered Nurses, about half (51.2%) received their training from either a two-year associate degree or a three-year diploma. 17 Even without considering registered nurses, most health care workers have jobs that require less than a bachelor s degree. The biggest employment challenge will be ensuring an adequate supply of registered nurses. This is the largest health care occupation, accounting for almost one out of every six health care jobs, 18 as well as a fast-growing occupation with a high number of annual openings. In addition, 30 percent of registered nurses are nearing retirement age. Compounding the issue, nursing schools cannot accommodate all applicants, primarily because of a faculty shortage. 19 The nurse educator workforce is aging and the salaries of these educators are considerably lower than if they were to work in hospitals. 20 In evaluating the supply and demand forces affecting labor markets for RNs, particularly upward pressure on wage rates, both the national and state levels project labor shortages for the immediate future. 21 LPNs in Ohio, on the other hand, are likely to experience a competitive labor market with more job seekers competing for fewer openings. In recent years, the educational infrastructure for LPN training has been built up to the point where this single source of LPN labor supply now produces training program graduates almost 300 percent greater than the projected total annual openings for LPNs in Ohio. LPN training produced 3,510 graduates in FY 2006 to fill about 17 U.S. Department of Health & Human Services, 2004. 18 ODJFS, 2006b. 19 American Association of Colleges of Nursing, 2005. 20 ODJFS, op. cit. 21 ODJFS, 2007b (pp. 6-12, 26-30, & 37-38). 14

1,200 projected annual openings from 2004 to 2014. 22 While not all LPN training program completers and license recipients will enter the labor market and seek LPN employment due to licensing difficulties, family responsibilities, health problems or other challenges, the large imbalance between the supply of LPN training program completers and demand implies a competitive labor market. Other sources of LPN labor supply, such as unemployed LPNs or occupational and geographic transfers, reinforce the conclusion of Ohio LPN labor surpluses. Furthermore, LPN training output of new graduates is increasing rapidly: 49 percent from 2004 to 2006. 23 These rapid increases were reflected in the accompanying increases in newly-issued LPN licenses in Ohio. The Ohio Nursing Board issued 3,436 new LPN licenses by examination in FY 2006, an increase of 32 percent over 2004. 24 The labor market conditions for the remaining ten selected occupations lie between the extremes of the RN and LPN labor markets. In general, the BLS has described the job outlook for these other occupations in positive terms. They noted that employment growth for medical secretaries would be above average and described the job outlook for emergency medical technicians and paramedics and for radiologic technologists and technicians as favorable, meaning a rough balance between the number of job openings and applicants is expected. The BLS described the job outlook for the remaining occupations as excellent or very good, meaning they expect more job openings than applicants. A recent study found that online job postings for technical health care occupations far outnumbered online postings of resumes for the same positions, indicating high demand. 25 Ohio projections for job growth by 2014 for these occupations are above the state average of 7.3 percent. 26 The lowest projected job growth was for medical secretaries at 8.9 percent, and the highest was for medical assistants at 42.2 percent. The statewide growth in wages from 2002 to 2006 presents a somewhat different picture. Wages for radiological technologists and technicians grew 24.7 percent, which was much larger than the Consumer Price Index (CPI) increase of about 10.3 percent in Ohio. Wages for medical records and health information technicians grew 17.0 percent during the same period. The large wage increases could indicate skill shortages for these occupations. Wages for nursing aides, orderlies, and attendants; medical assistants; and emergency medical technicians and paramedics all rose more slowly than the CPI. Wages for medical secretaries, dental assistants, medical and clinical laboratory technologists, dental hygienists, and respiratory therapists increased as fast as or somewhat faster than the CPI. The next section examines the infrastructure that supplies formally trained workers for these occupations. 22 Ibid (p. 12). This total excludes baccalaureate graduates, who are more mobile and may compete in labor markets outside of the area in which they trained. 23 Ibid. 24 Ibid. 25 ODJFS, 2006a. 26 ODJFS, 2006b. 15

IV. Education & Training Infrastructure Training requirements in our 12 key health care occupations may be met in one of two ways: degree or certificate attainment at postsecondary institutions or apprenticeship programs. Only five of the 12 key occupations have apprenticeship programs in Ohio. An additional two are apprenticeable occupations, but do not have active programs in the state. Currently, there are 31 apprenticeship programs in Ohio in key health care occupations. There are 11 programs each for nursing aides and dental assistants. The others are for medical secretaries, medical assistants, and emergency medical technicians. Almost all of these programs are located in Southwest Central Ohio, which includes the Dayton area. Programs for any other apprenticeable occupations would only be on specific aspects of the occupation. For example, the Medical Coder program would fall under medical records and information technicians. For radiologic technologists and technicians there are five different apprenticeship options: Computer Tomography Technicians, Diagnostic Imaging Specialties, Magnetic Resonance Imaging Technicians, Mammography Technologists, and Tumor Registrars. Although formal education or structured training is available for most healthcare occupations, not all occupations require state licensing or certification. For occupations that require state licensing or certification, the supply of program completers is crucial for determining the job opportunities in these occupations. The supply of education or training program completers may be less crucial in determining the job opportunities for occupations that do not require state licensing or certification. In order to compare an occupation with the common postsecondary programs that feed into the occupation, we compiled a list of training programs for each of the twelve key occupations in appendix C, using unit-of-analysis information from the Occupational Supply Demand System. 27 In Ohio, RNs, LPNs, emergency medical technicians (EMTs), dental hygienists, and respiratory therapists are required to have a state license or certification. Ohio also has a program for state-tested nurse aides. The other occupations selected do not require Ohio licensure or certification. The total number of program completers at the bachelor s level and below is shown in Figure 12 compared with projected average annual openings. Training program supply does not include degrees above the bachelor s level for three reasons. First, for many occupations, especially registered nursing, only current incumbents attain master s or higher degrees, usually to enter a specialty. In other words, those earning these higher degrees are already in the labor market. Second, high educational attainment usually means greater geographic mobility, so these degree holders may compete in a broader or national labor market area. Third, on a practical level, most publicly funded worker training programs are for a shorter period of time, and thus not sufficient to cover anything higher than an associate degree. 27 2008. 16

Figure 12: Demand/Training Supply Comparisons in Key Health Care Occupations Title Avg. An. Openings 2004-14 Training Output 2005-06 Entering Labor Market Difference 2006 Avg. Hr. Wage Wage Growth 2002-06 Registered Nurses* 4,630 5,397 4,587 43 $26.50 17.8% Nursing Aides, Orderlies, and Attendants 1,994 1,113 946 1,048 $10.98 10.4% Licensed Practical & Licensed Vocat. Nurses 1,204 3,519 2,991-1,787 $18.08 13.7% Medical Secretaries 752 825 701 51 $12.82 11.8% Medical Assistants 1,044 3,202 2,722-1,678 $12.09 8.9% Dental Assistants 582 579 492 90 $14.28 14.4% Emergency Medical Technicians & Paramedics 301 682 580-279 $12.64 3.0% Radiologic Technologists and Technicians 394 567 482-88 $21.93 24.7% Medical Records & Health Info. Technicians 227 694 590-363 $14.25 17.0% Medical and Clinical Laboratory Technologists 275 98 83 192 $23.07 15.3% Dental Hygienists 226 244 207 19 $28.00 12.5% Respiratory Therapists 278 265 225 53 $21.67 15.2% Entering Labor Market reflects that of those completing training programs, about 15 percent do not enter the occupational market. Please see the Technical Notes. Training Output includes completers through the Bachelor's level. *Training output only includes Registered Nurse Training (CIP 51.1601). Source: ODJFS, 2006b; OSDS 2008; Ohio Board of Regents, 2007; BLS, 2007b. Looking at training output, one must bear in mind that on average, about 15 percent of those completing training programs in health care occupations do not go on to enter their respective labor markets. 28 Individuals may have a variety of reasons for not entering the labor market, such as failure to pass licensing exams, health problems, or family obligations. This reduced supply is shown in the entering labor market column and is used for direct comparison with the demand of annual openings. Also note that any projected training shortage may only be temporary if the training requirements for an occupation are relatively low. For example, training for nursing aides, orderlies and attendants lasts for a month or two, leading to a postsecondary vocational award. Additionally, for occupations not requiring state licensure or certification, structured training programs may not be the only source of occupational supply. Still, this could be a significant barrier to entry in an occupation, especially if training options in an area are limited. The purpose of Figure 12 is not to identify labor shortages or surpluses in the market. Rather, this table is intended to measure whether the current educational infrastructure meets market demand. That is, whether there is an educational shortage or surplus. One example of an occupation that does not appear to have sufficient educational programs is medical and clinical laboratory technologists. There is a difference of 192 fewer training program completers expected to enter the job market and projected average annual openings. The comparisons of demand and training output in Figure 12 are not enough to determine a labor shortage or surplus. Determining the incidence of shortage or surplus of labor in a given occupation requires examination of several economic indicators. It is recommended that forecasts of labor shortages in any occupation be based on conclusions reached using the six 28 Ohio Board of Regents, 2007. 17

different state and national planning models of (a) high employment prospect occupations, (b) the human resource accounting model statewide (of occupational employment projections, training, and licensing data), (c) occupational wage data over time, (d) hard-to-fill job order statistics from the Ohio Job Matching System, (e) America s Job Bank keyword analysis of occupational balances and imbalances, and (f) BLS analyses of occupational labor market opportunities and competition in the Occupational Outlook Handbook (OOH) and its supplement, Occupational Projections and Training Data. 29 One indicator of labor shortage or surplus growth in average wages is shown alongside education in Figure 12. Comparing wage growth from 2002 to 2006 with inflation during the same period (about 12.1% for all national urban areas) can hint as to whether supply is keeping pace with demand. Wage growth for radiologic technicians and technologists (24.7%) and for RNs (17.8%) is significantly higher than inflation, suggesting a possible shortage for those occupations. Finally, some imbalances in labor markets may occur for reasons such as a lack of occupational knowledge among workers or inadequate recruitment efforts among employers. For example, people unaware of certain occupational opportunities will not choose training programs leading to employment in those occupations. 30 29 ODJFS, 2007b. 30 Richardson, 2007. 18

V. Regional Analysis The Ohio Department of Development has divided the state into twelve Economic Development Regions (EDRs) for analytical and administrative purposes. A map of the EDRs and their names can be found in Appendix A. A brief comparison of the health care industry, its key occupations, and vital training programs in each of the EDRs follows. Figure 13 below compares location quotients (LQs) for health care industries in each of the EDRs. A location quotient may be defined as an industry s proportion of total employment for a region as a ratio of its proportion of total employment nationally. An LQ greater than one indicates that industry employment is more concentrated in a region than nationally, while less than one means that it is less concentrated. LQs of 1.2 or more are highlighted in gray. Economic Development Region Figure 13: Health Care Location Quotients Health Care & Social Assist. Ambl. Health Care Hospitals Nursing & Res. Care Ohio Statewide 1.1 1.0 1.2 1.4 Central 1.0 1.0 1.0 1.0 Northwest 1.2 1.2 1.3 1.6 West Central 1.1 0.9 1.1 1.5 Southwest Central 1.1 1.0 1.2 1.4 Southwest 1.1 1.1 1.1 1.2 North Central 1.1 1.0 0.9 1.8 Southern 1.6 1.5 1.5 2.3 Northern 1.2 1.0 1.5 1.4 Northeast Central 1.1 1.1 1.1 1.4 East Central 1.3 1.1 1.2 2.0 Southeast 1.3 1.3 0.9 2.0 Northeast 1.3 1.4 1.0 1.9 The table clearly indicates that across Ohio, employment in nursing and residential care is highly concentrated relative to the rest of the nation. In some regions, this industry s share of employment is more than twice as much as in the U.S. The only region that has a normal share of employment in this industry is Central Ohio, which includes most of the Columbus metropolitan area. While location quotients are generally used to determine whether a region is host to an export industry, this measure does have some drawbacks, especially in regards to health care. For some areas, health care may comprise a large portion of employment if there is high local unemployment or if most of the economy relies on employment not covered by the Quarterly Census of Employment and Wages (QCEW). And because demand for health care services may be regarded as relatively inelastic as the economy grows and contracts, it may be expected to stick out more in an economically-ailing region. Thus, Northern Ohio s LQ of 1.5 for hospitals might reflect high employment at some nationally-recognized establishments, while the same hospital LQ in Southern Ohio (Chillicothe, Portsmouth and environs) may reflect the relative lack of employment in other covered industries. 19

Since we might expect demand for health care to stay constant relative to general economic conditions, we could use total population as a proxy for demand. A ratio of employment to population higher than the national ratio might indicate greater demand for services than would normally be supported by the local area an export industry. (In any of these local/national comparison statistics, we are assuming constant labor productivity and constant patterns of consumption or general health.) Figure 14: Formula for Modified Population Location Quotient Er Pn PLQ = E P A formula for this new measure call it the population location quotient or PLQ is shown above, where E r is the industry s regional employment, E n is the industry s national employment, P r is regional population and P n is national population. Results are shown in Figure 15 below. Within the hospital industry, Northern Ohio has the highest quotient, indicative of an export industry for this region. Other strong regions include Northwest Ohio (the Toledo area) and Southwest Ohio (the Cincinnati area). Interestingly, Central Ohio s quotient is only slightly elevated. As with the regular LQ earlier, nursing and residential care is still very concentrated across Ohio. Figure 15: Modified Health Care Population Location Quotients Economic Development Region Health Care & Social Assist. n r Ambl. Health Care Hospitals Nursing & Res. Care Ohio Statewide 1.2 1.1 1.2 1.4 Central 1.2 1.1 1.1 1.2 Northwest 1.3 1.2 1.3 1.7 West Central 1.1 0.9 1.1 1.5 Southwest Central 1.2 1.1 1.2 1.4 Southwest 1.2 1.2 1.2 1.4 North Central 0.9 0.8 0.8 1.5 Southern 1.0 1.0 0.9 1.5 Northern 1.4 1.1 1.7 1.5 Northeast Central 1.1 1.1 1.1 1.4 East Central 1.0 0.9 1.0 1.6 Southeast 0.8 0.8 0.6 1.3 Northeast 1.1 1.2 0.9 1.7 Figure 10 earlier in this report had identified 12 occupations key to the health care industry: RNs; nursing aides and orderlies; LPNs; medical secretaries; medical assistants; dental assistants; EMTs; radiologic techs; medical record techs; medical and clinical laboratory techs; dental hygienists; and respiratory therapists. Appendix D at the end of this report lists employment projections and current wages for each of these occupations in each of the Economic Development Regions. Figure 16 compares the relative ranks of average hourly wages for each of the occupations. In most of these regions, the top three occupations are dental hygienists, registered nurses, and medical and clinical lab technologists, with hygienists or RNs usually having the highest wages. 20

There is not much variation in rankings between regions, with those occupations requiring more education and training generally commanding higher wages. Bear in mind that wage data are not available for all areas and all occupations; if wage data are suppressed in certain regions, ranks for other occupations may be artificially high. Figure 16: Relative Ranks of 2006 Average Hourly Wages by EDR, Selected Occupations Ohio EDR 1 EDR 2 EDR 3 EDR 4 EDR 5 EDR 6 EDR 7 EDR 8 EDR 9 EDR 10 EDR 11 EDR 12 Dent. Hyg. 1 1 1 1 1 3 1 1 2 RNs 2 2 2 1 2 2 1 1 1 2 2 1 1 Lab Techs 3 3 3 2 3 3 2 2 3 Resp. Ther. 4 4 5 5 4 4 4 3 Rad. Techs 5 4 4 5 3 4 5 4 LPNs 6 5 6 3 6 6 5 5 2 6 3 2 5 Dent. Assts. 7 6 9 8 7 6 5 8 Med. Rec. Techs 8 9 7 7 9 6 3 9 4 3 6 EMTs 9 7 11 8 7 8 7 7 Med. Secs. 10 8 8 4 9 11 11 7 4 8 5 4 10 Med. Assts. 11 10 10 10 10 9 9 6 10 6 5 9 Nurs. Aides 12 11 12 5 11 12 10 8 11 7 6 11 Figure 17 shows similar rankings for projected average annual openings from 2004 to 2014. Across all regions, registered nursing will have the strongest job openings, followed by nursing aides and licensed practical nurses. Again, there is little variation between regions in the relative ranks of annual openings. And like before, suppression in certain occupations may lead to artificially high rankings. Figure 17: Relative Ranks of Projected 2004-14 Average Annual Openings by EDR, Selected Occupations Ohio EDR 1 EDR 2 EDR 3 EDR 4 EDR 5 EDR 6 EDR 7 EDR 8 EDR 9 EDR 10 EDR 11 EDR 12 RNs 1 1 1 1 1 1 1 1 1 1 1 1 1 Nurs. Aides 2 2 2 2 2 2 2 2 2 2 2 2 2 LPNs 3 4 3 3 3 4 3 3 3 3 3 3 3 Med. Assts. 4 3 4 5 4 3 4 4 4 4 4 4 4 Med. Secs. 5 5 5 4 5 6 5 5 5 5 5 5 5 Dent. Assts. 6 6 6 6 6 5 6 6 6 6 6 6 Rad. Techs 7 7 9 8 7 7 8 8 7 8 7 7 EMTs 8 9 8 11 10 8 7 10 7 9 Resp. Ther. 9 11 7 7 9 12 9 9 9 8 10 Lab Techs 10 10 11 8 8 9 11 9 8 12 11 Med. Rec. Techs 11 12 9 11 12 11 12 11 10 9 6 11 Dent. Hyg. 12 8 12 10 11 10 10 7 12 10 10 8 21

VI. Conclusions The health care industries present exciting opportunities and challenges for workforce development in Ohio. Historically, health care industries have been relatively immune to fluctuations in the business cycle. Employment in health care industries has increased almost linearly since the mid-1970s and is expected to continue growing strongly because of an aging population. Not all health care industries and occupations share the same employment outlook. The hospital industry tends to have a relatively small number of establishments with a large number of employees, and the ambulatory health care services and the nursing and residential care facilities industries tend to have more numerous establishments with fewer employees. Health care occupations can be high-skill, high-wage occupations or low-skill, low-wage occupations. The key for workforce development will be to see to it that there is an adequate supply of workers for the high-skill occupations. As a group, employment in 77 different health care occupations is expected to grow by 19.5 percent between 2004 and 2014. Most of these occupations are expected to grow faster than the statewide average for all occupations, 7.3 percent. High job growth and occupational demand also carries the potential for shortages where the educational infrastructure cannot keep pace with demand. The classic example is the labor market for registered nurses. Demand for highly skilled registered nurses is increasing, and the average educational attainment of registered nurses will probably increase. In addition to employment growth, the health care industries will also face an increasing need to replace retiring workers. Many health care occupations have a high proportion of workers ages 45 to 55. Employers and educators should anticipate potential losses of crucial health care workers due to retirements and plan accordingly. High-skill occupations tend to rely on structured training or educational programs for a supply of workers. The educational infrastructure of an occupation can affect its labor market. For example, the current educational infrastructure may not be able to produce enough RNs in the future because of faculty shortages. Education for registered nurses will need to consider both future job demand and the education infrastructure. Other high-skill health care occupations may need to make similar considerations. Planners should also be concerned about the potential for over production, which appears to be the current situation for Licensed Practical Nurses. Over production will create a competitive labor market among program completers and could depress wages. Another challenge for workforce development in Ohio will be the geographic distribution of both the need for health care workers and the training and education of those workers. The distribution of the educational training opportunities across the state may not always be aligned with the demand for health care workers. 22

Technical Notes Industrial employment and wage data in this report are from the Quarterly Census of Employment and Wages (QCEW). These data are compiled using unemployment compensation tax returns and administrative data. As a result, business establishments not covered by Ohio unemployment compensation law are not counted. Most health care business establishments are covered and are thus included. All industries in this report were classified using the North American Industrial Classification System (NAICS) 2002 edition, developed in part by the U.S. Office of Management and Budget. NAICS assigns each industry a 2- to 6-digit code, with longer codes assigned to more detailed industries. For more details on NAICS and a complete listing of industries and codes, please visit http://www.census.gov/epcd/www/naics.html. Occupational employment and average wage data in this report are from the Occupational Employment Statistics (OES) program. These survey estimates are compiled through voluntary questionnaires sent to business establishments around the state on a three-year cycle. Not all OES data are comparable over time, especially if major changes have been made to the series. Given the limited scope of this project, however, we believe we can make reasonable longitudinal comparisons of the data, specifically average hourly wages. Point estimates at the state level have low relative standard errors, indicating a high degree of accuracy for each year. Plus, year-to-year stability of these estimates suggests the health care data have been affected less by classification changes than in other industries. Occupations in this report were largely classified using Standard Occupational Classifications (SOC). Like NAICS, SOC uses a set of 2- to 6-digit codes to classify standardized occupations, with longer codes going to more detailed occupations. For details on SOC, please visit http://www.bls.gov/soc/home.htm. The occupational aging data shown in Figure 9 were developed as part of a study of occupational replacement rates by the State Projections Workgroup and were derived from the 2000 Decennial Census. The complete set of data is available from ODJFS upon request. These data were originally classified using the Census 2000 Equal Employment Opportunity (EEO) tabulations. EEO and SOC are slightly different and have some inconsistencies. These classifications were converted before analysis. For details on Census classifications, visit http://www.census.gov/hhes/www/index/view.html. Data on educational program completions are from the Integrated Postsecondary Education Data System (IPEDS) from the U.S. Department of Education. To log on to the IPEDS system and download data, visit http://nces.ed.gov/ipedspas/. Instructional programs were classified using Classifications of Instructional Programs (CIP). Again, CIP uses a set of 2- to 6-digit codes to classify standardized educational programs. For details, visit http://nces.ed.gov/pubs2002/cip2000/. 23